Struggling smartphone maker BlackBerry reported a major net second quarter loss Friday and said it is burning cash at a higher rate as it moves to execute a tentative deal that could take the company private.

Revenue for the quarter that ended Aug. 31 was $1.6 billion, with a net loss of $965 million, or $1.84 a share. That compares with revenue of $2.9 billion and a loss of $229 million, or 44 cents a share, for the same quarter last year.

Adjusted net loss from continuing operations was $248 million, or 47 cents per share. The per-share loss was on the low side of the 47 cent-to-51-cent range that BlackBerry warned of last week, when it announced preliminary results and plans to lay off 4,500 employees. Wall Street analysts had expected a loss of 49 cents a share.

Most of the financial results tracked last week's announcement. But BlackBerry disclosed that its operations consumed roughly $136 million in cash. That compares with $630 million in cash flow from operations in the previous quarter that ended June 1.

“We are very disappointed with our operational and financial results this quarter.”

BlackBerry CEO Thorsten Heins

BlackBerry also reported $72 million in pretax expenses for restructuring.

BlackBerry CEO Thorsten Heins says he was unhappy with the results, which were released before financial markets opened Friday. BlackBerry shares were up more than 1% at $8.08 shortly after noon in Friday trading.

.

"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," Heins said in statement issued with the earnings report. "We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt."

The company has been struggling with slower than expected sales of its new line of BlackBerry 10 smartphones. At the same time, BlackBerry faces increased competition from two new smartphones Apple added to its lineup, and from Samsung's Android phone offerings.

BlackBerry took a charge of almost $1 billion related to unsold inventory of its new Z10 smartphones. The move highlighted how much of a flop the product launch has been - even worse than the company's PlayBook tablet computer.

"That was not a great launch at all," said Maynard Um, an analyst at Wells Fargo. "With the PlayBook it wasn't such a big launch effort, but the Z10 went out with a whole lot more fanfare."

When mobile devices go unsold the hardware manufacturer typically works with "channel partners," like wireless network operators AT&T and Verizon, to cut prices and share the financial pain.

It's not clear what BlackBerry will do, however the company will probably have to play nice with its channel partners, especially a company like AT&T which is helping BlackBerry as it tries to build its enterprise business.

"It's tough to turn your back on the channel because your channel helps you sell products and services," Um said.

Friday's filing followed BlackBerry's Monday announcement of a tentative $9-a-share deal in which Fairfax Financial Holdings, the company's largest stockholder, would take the Canada-based company private. If completed, the transaction would value BlackBerry at $4.7 billion.

The plan is headed by Fairfax Chairman Prem Watsa, whose business success has been likened to that of billionaire investment expert Warren Buffett.

Citing the tentative deal, BlackBerry canceled a conference call that had been scheduled Friday to discuss the quarterly results with Wall Street financial analysts. The company said its management discussion and analysis of the financial results would be filed next week.